South China city restricts property purchases

The city of Zhuhai on China’s south coast introduced measures to cool its real estate market including a cap on residential property prices, stiffer restrictions on who can buy a house and a limit of one housing unit purchase per family, the Financial Times reported. Those who have not paid taxes or social security in the past year will be ineligible to buy apartments. Prices are capped at RMB11,285 (US$1,776) per square meter through the end of the year. The move comes in spite of the fact that housing sales and prices declined last month across much of the country, which led many observers to expect an easing of restrictions. Stock prices fell for developers Evergrande (3333.HKG), China Vanke (000002.SZSE; CVKEF.SH) and Longfor (0960.HKG) on the news of the restriction in addition to reports that some developers are offering large discounts. The Chinese government’s recent real estate policies aim to make housing more affordable for average Chinese without deflating strong growth in the construction sector.